Moody's

Moody's Corporation is an American credit rating agency. Moody's is one of the world biggest credit rating agency. Actually, Moody's Corporation is the parent company of Moody's Investors Service, the subsidiary company that provides credit rating. Moody's Investors Service is the most important subsidiary of Moody's Corp.

Credit rating agencies are companies that evaluate the ability of governments and large companies, to pay back it's debt.

Together with Standard & Poor's and Fitch Ratings Scale, Moody's is one of the world biggest credit rating agency.

These sector is very concentrated. Standard & Poors and Moody's have 80% of the market.

The search and acquisition of information is costly. Credit rating agencies solve partially this issue. They sell their information to governments and large companies.

The creditability of credit rating agencies has fallen after the subprime crisis. Agencies gave good scores to mortgage backed investments, whose value fell sharply during the crisis. They gave an “A” (a very good qualification) to Lehman Brothers, that went bankruptcy after the crisis.

Historically, the issuers of instruments have been the clients of the credit rating agencies. This represent an important market failure, because the credit rating agency has incentives to give a good qualification, otherwise the issuer will look for a rating of another agency. It would be better if the clients would be investors and not issuers.

Moody's tracks debt instruments of 135 countries, 11,000 corporate issuers and 21,000 public finance issuers.

Moody's was founded by John Moody in 1909.

Moody has it's headquarters in New York and has presence in 41 countries. It has 11,700 employees.

It has a yearly revenue of US$3.6 billion <!– use api–>

It's a public company, it's stock is MCO and is traded in the NYSE.

Moodys